38366 Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f). 

13 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3References herein to BX Rules in the 4000 Series 

shall mean Rules in BX Equity 4. 4An ‘‘Order Attribute’’ is a set of variable 

instructions that may be associated with an Order 

to further define how it will behave with respect to 

pricing, execution, and/or posting to the Exchange 

Book when submitted to the System. See Equity 1, 

Section 1(a)(11). 

5The RASH (Routing and Special Handling) 

Order entry protocol is a proprietary protocol that 

allows members to enter Orders, cancel existing 

Orders and receive executions. RASH allows 

participants to use advanced functionality, 

including discretion, random reserve, pegging and 

routing. See http://nasdaqtrader.com/content/ 

technicalsupport/specifications/TradingProducts/ 

rash_sb.pdf. 

equally to all Members and allocation of 

listed securities between LMMs is 

governed by Exchange Rule 11.8(e)(2). 

Further, if an LMM does not meet the 

Minimum Performance Standards for 

three out of the past four months, the 

LMM is subject to forfeiture of LMM 

status for that LMM Security, at the 

Exchange’s discretion. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 11 and paragraph (f) of Rule 

19b–4 12 thereunder. At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission will institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CboeBZX–2021–050 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–CboeBZX–2021–050. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–CboeBZX–2021–050 and 

should be submitted on or before 

August 10, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–15343 Filed 7–19–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92409; File No. SR–BX– 

2021–030] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Equity 4, Rule 

4703 

July 14, 2021. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on July 7, 

2021, Nasdaq BX, Inc. (‘‘BX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Equity 4, Rule 4703,3 in light of planned 

changes to the System, as described 

further below. The text of the proposed 

rule change is available on the 

Exchange’s website at https://

listingcenter.nasdaq.com/rulebook/bx/ 

rules, at the principal office of the 

Exchange, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Presently, the Exchange is making 

functional enhancements and 

improvements to specific Order 

Attributes 4 that are currently only 

available via the RASH Order entry 

protocol.5 Specifically, the Exchange 

will be upgrading the logic and 

implementation of these Order Types 

and Order Attributes so that the features 

are more streamlined across the 

Exchange Systems and order entry 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices 38367 

6The OUCH Order entry protocol is a proprietary 

protocol that allows subscribers to quickly enter 

orders into the System and receive executions. 

OUCH accepts limit Orders from members, and if 

there are matching Orders, they will execute. Nonmatching Orders are added to the Limit Order Book, 

a database of available limit Orders, where they are 

matched in price-time priority. OUCH only 

provides a method for members to send Orders and 

receive status updates on those Orders. See https:// 

www.nasdaqtrader.com/Trader.aspx?id=OUCH. 

7The Exchange designed the OUCH protocol to 

enable members to enter Orders quickly into the 

System. As such, the Exchange developed OUCH 

with simplicity in mind, and it therefore lacks more 

complex order handling capabilities. By contrast, 

the Exchange specifically designed RASH to 

support advanced functionality, including 

discretion, random reserve, pegging and routing. 

Once the System upgrades occur, then the Exchange 

intends to propose further changes to its Rules to 

permit participants to utilize OUCH, in addition to 

RASH, to enter order types that require advanced 

functionality. 

8The Exchange notes that its sister exchange, The 

Nasdaq Stock Market, LLC (‘‘Nasdaq’’), has already 

filed similar proposed rule changes with the 

Commission. See Securities Exchange Act Release 

No. 34–92180 (June 15, 2021), 86 FR 33420 (June 

24, 2021) (SR–NASDAQ–2021–044). 

9See Securities Exchange Act Release No. 34– 

91334 (March 16, 2021), 86 FR 15277 (March 22, 

2021) (SR–BX–2021–005); Securities Exchange Act 

Release No. 34–90607 (December 8, 2020), 85 FR 

80842 (December 14, 2020) (SR–BX–2020–034). 

10See Rule 4703(d). 

11See Rule 4703(l). 

12See Rule 4703(d) (defining ‘‘Primary Pegging’’ 

as pegging with reference to the inside quotation on 

the same side of the market, ‘‘Market Pegging’’ as 

pegging with reference to the inside quotation on 

the opposite side of the market, and ‘‘Midpoint 

Pegging’’ as pegging with reference to the midpoint 

between the inside bid and the inside offer). 13This change is applicable to Primary, Market 

and Midpoint Pegging Orders entered via RASH/ 

FIX; OUCH/FLITE Midpoint Pegging behavior is not 

affected by this change. The Exchange also proposes 

to amend existing language in this provision which 

states that ‘‘if the Inside Bid and Inside Offer are 

crossed or if there is no Inside Bid and/or Inside 

Offer, the Order will be cancelled or rejected.’’ The 

proposed amendment would specify that this 

language applies only to Orders with Midpoint 

Pegging entered through OUCH or FLITE and also 

replace the phrase ‘‘will be cancelled or rejected’’ 

with ‘‘will not be accepted’’ (to render the text 

consistent with the analogous Nasdaq rule). The 

proposed changes to pegged orders entered through 

RASH or FIX will allow the Exchange to handle the 

Order more consistent with the customer intended 

instruction, and are necessary to facilitate 

forthcoming System enhancements. 

14Meanwhile, the Exchange proposes to amend 

the Rule to state that if a Pegged Order is assigned 

a Routing Order Attribute, and a permissible 

pegging price is not available upon entry, then the 

Order will continue to be rejected. The Exchange 

proposes to retain existing practice for Pegged 

Orders with Routing Order Attributes because the 

Exchange is not yet prepared to make similar 

changes to such Orders, although it contemplates 

doing so in the near future. 

15When a Pegged Order lacks a pegging price or 

a permissible pegging price, the System will not 

wait indefinitely for a pegging price or a 

permissible pegging price to become available. 

Instead, the System will cancel the Order if no 

permissible pegging price becomes available within 

one second after Order entry or after the Order was 

removed due to the lack of a permissible pegging 

price and no longer available on the Book. The 

Exchange may, in the exercise of its discretion, 

modify the length of this maximum time period by 

posting advance notice of the applicable new time 

period on its website. 

16 In this paragraph of Rule 4703(d), the Exchange 

again proposes to state that it will continue to reject 

a Pegged Order entered through RASH or FIX when 

a permissible pegging price is unavailable, if the 

Pegged Order is assigned a Routing Order Attribute. 

The Exchange will continue to accept certain 

Market and Primary Pegged Orders at their limit 

price where they have Routing Order Attributes. 

The Exchange proposes to retain existing practice 

for Pegged Orders with Routing Order Attributes 

because the Exchange is not yet prepared to make 

similar changes to such Orders, although it 

contemplates doing so in the near future. 

17An example of a scenario where pegging would 

lead to a price at which an Order cannot be posted 

is as follows. Assume that the NBBO is $0.0002 × 

$0.0003. A Primary Pegged Order to buy is entered 

with a passive offset amount of $0.0003. This would 

result in the Order being made unavailable by the 

Exchange as ¥$0.0001 is not a permissible price. 

Currently, the Exchange accepts such Orders at its 

limit price, and will post the Orders to the 

Exchange Book in accordance with the parameters 

that apply to the underlying Order Type. 

18The Exchange proposes to apply a similar time 

limitation to the holding period prescribed above. 

Similarly, the Exchange proposes to add that for an 

Order with Midpoint Pegging, if the Inside Bid and 

Inside Offer become crossed, or there is no Inside 

Bid or Inside Offer, the System will cancel the 

Order if no permissible price becomes available 

within one second after the Order was removed and 

no longer available on the Exchange Book (the 

Exchange may, in the exercise of its discretion 

Continued 

protocols, and will enable the Exchange 

to process these Orders more quickly 

and efficiently. Additionally, this 

System upgrade will pave the way for 

the Exchange to enhance the OUCH 

Order entry protocol 6 so that 

Participants may enter such Order 

Types and Order Attributes via OUCH, 

in addition to the RASH Order entry 

protocols.7 The Exchange plans to 

implement its enhancement of the 

OUCH protocol sequentially, by Order 

Type and Order Attribute.8

To support and prepare for these 

upgrades and enhancements, the 

Exchange recently submitted two rule 

filings to the Commission that amended 

its rules pertaining to, among other 

things, Market Maker Peg Orders and 

Orders with Reserve Size.9 The 

Exchange now proposes to further 

amend its Rules governing Order 

Attributes, at Rule 4703. In particular, 

the Exchange proposes to adjust the 

current functionality of the Pegging 10

and Trade Now Attributes,11 as 

described below, so that they align with 

how the System, once upgraded, will 

handle these Order Attributes going 

forward. 

Changes to Pegging Order Attribute 

First, the Exchange proposes to 

amend Rule 4703(d), which governs the 

Pegging Order Attribute. The Exchange 

offers three types of Pegging: Primary 

Pegging, Market Pegging, and Midpoint 

Pegging.12 The Rule presently provides 

that if, at the time of entry, there is no 

price to which a Pegged Order can be 

pegged, the Order will be rejected, 

provided, however, that a Displayed 

Order that has Market Pegging, or an 

Order with a Non-Display Attribute that 

has Primary Pegging or Market Pegging, 

will be accepted at its limit price. The 

Exchange proposes to replace this text 

by stating that if, at the time of entry, 

there is no price to which a Pegged 

Order, that has not been assigned a 

Routing Order Attribute, can be pegged 

or pegging would lead to a price at 

which the Order cannot be posted, then 

the Order will not be immediately 

available on the Exchange Book and will 

be entered once there is a permissible 

price.13 The Exchange proposes this 

change so as to enhance the manner in 

which the Exchange presently handles 

Pegged Orders in this scenario. Rather 

than reject such Orders outright, and 

require customers to continuously 

reenter the Orders thereafter until a 

pegging price emerges, which may cost 

them queue priority, the Exchange 

believes that it would be more efficient 

and customer-friendly to simply hold a 

Pegged Order until a permissible 

pegging price emerges.14

A similar rationale applies to the 

Exchange’s proposal to cease accepting 

certain Market or Primary Pegged 

Orders at their limit prices if no pegging 

price is available. Because participants 

presumably prefer for their orders to 

post at the pegging price, the Exchange 

believes that participants would prefer 

for the Exchange to hold such orders 

until a permissible pegging price 

emerges, rather than post the orders at 

their limit prices.15 16

The Exchange proposes similar 

changes to the paragraph of Rule 

4703(d) that applies to Pegged Orders 

entered through RASH or FIX that 

posted to the Exchange Book. The text 

presently provides that if the price to 

which an Order is pegged is not 

available, the Order will be rejected. 

The Exchange proposes instead to state 

that if the price to which an Order is 

pegged becomes unavailable or pegging 

would lead to a price at which the Order 

cannot be posted,17 then the Exchange 

will remove the Order from the 

Exchange Book and re-enter it once 

there is a permissible price. Again, the 

Exchange proposes this change to 

enhance and make the System more 

efficient by providing for the Exchange 

to re-post the Pegged Orders rather than 

rejecting them when there is no 

permissible pegging price and requiring 

participants to re-enter them once a 

valid price becomes available.18 The 


khammond on DSKJM1Z7X2PROD with NOTICES
38368 Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices 

modify the length of this one second time period 

by posting advance notice of the applicable time 

period on its website). For an Order with Midpoint 

Pegging with a Routing Attribute, the new one 

second time period will be applicable. The 

Exchange notes that it had inadvertently omitted 

from the existing Rule portions of this new 

proposed language that addresses the handling of 

Midpoint Pegged Orders if the Inside Bid or Inside 

Offer become crossed or if there is no Inside Bid 

or Inside Offer, even though this provision was 

intended to mirror a corresponding rule 4703(d) in 

the Nasdaq Rulebook. The proposal corrects this 

omission. 

19Additionally, the Exchange proposes to replace 

the word ‘‘would’’ with ‘‘could’’ in this provision, 

so as to clarify that collars apply in circumstances 

in which Pegged Orders might execute, but do not 

necessarily do so. An example of a circumstance in 

which such Orders do not execute is as follows. 

Assume that the NBBO is $10.00 × $10.01. A Market 

Pegged Order to buy posts at $10.01. The NBBO 

then updates to $10.00 × $11.00. Because re-pricing 

and posting the Market Pegged Order would result 

in the Order being available on the Book and 

executable at $11.00 (outside of the collars), the 

Order will be canceled. 

20The Exchange notes that the Rule presently 

does not refer to crossing scenarios. The Exchange 

proposes to add such references for completeness 

and consistency with the corresponding rules of 

Nasdaq and Nasdaq PHLX. An example of a 

crossing scenario is as follows. A non-displayed 

Order to buy rests on the Book at $0.9995. 

Thereafter, a Post Only Order to sell is entered at 

$0.9994, which would post on the Book and display 

at $0.0014 [sic], thereby crossing the non-displayed 

Order as the price improvement requirements were 

not met. 

21This proposed change in functionality for 

OUCH and FLITE is enabled by the migration of 

Trade Now to the Exchange’s matching System. 

22The Exchange proposes to add language to Rule 

4703(l) to state that Trade Now allows a resting 

Order that becomes locked ‘‘or crossed, as 

applicable at its non-displayed price’’ by the 

‘‘posted price’’ of an incoming Displayed Order to 

execute against a locking or crossing Order(s) 

automatically. The Exchange proposes to add the 

phrase ‘‘or crossed, as applicable, at its nondisplaced [sic] price’’ for completeness. It also 

proposes to add the phrase ‘‘posted price’’ for 

purposes of clarity. It merely communicates that the 

incoming Displayed Order first posts to the 

Exchange Book, thereby locking or crossing the 

resting Order at its non-displayed price. 

23 15 U.S.C. 78f(b). 

24 15 U.S.C. 78f(b)(5). 

25The Exchange notes that as part of this 

proposed change, if there is no Pegging Price upon 

entry for a Displayed Order that has Market 

Pegging, or an Order with a Non-Display Attribute 

that has Primary Pegging or Market Pegging, then 

it will no longer accept such Orders at their limit 

price. The Exchange believes that this proposed 

change is consistent with the Act because it better 

aligns with customer intentions for Pegged Orders 

to post at a Pegging Price. That is, the Exchange 

believes that participants prefer for Pegged Orders 

to be entered at a Pegging Price, rather than its 

entered limit price, even if that means that the 

Order must wait for a Pegging Price to become 

available. As discussed above, the Exchange does 

not propose this change for Pegged Orders with 

Routing Attributes. 

26 It is also consistent with the Act to limit the 

time period for which the Exchange will hold, 

without canceling, Pegged Orders for which there 

is no pegging price or permissible pegging price 

because the Exchange does not believe that 

customers would want the Exchange to hold their 

orders indefinitely. Moreover, holding such orders 

indefinitely would encumber the Exchange’s 

System. The Exchange believes that a one second 

holding period for such orders is long enough to 

provide the above-stated efficiencies for 

participants, but not too long as to encumber them. 

However, the Exchange believes that it is reasonable 

to reserve discretion to alter the holding period, 

from time to time, should it determine that doing 

so better meets the needs of customers or its System 

resources. 

27Additionally, the Exchange believes that it is 

consistent with the Act to replace the word 

‘‘would’’ with ‘‘could’’ in this provision, because 

doing so would clarify that collars apply in 

circumstances in which Pegged Orders might 

execute, but do not necessarily do so. See supra, 

n.19. 

Exchange notes that the proposed 

change will not apply to Pegged Orders 

with Routing Attributes assigned to 

them; the existing Rule functionality 

will continue to apply to those Orders. 

Rule 4703(d) also subjects Pegging 

Orders to collars, meaning that any 

portion of a Pegging Order that would 19

execute, either on the Exchange or when 

routed to another market center, at a 

price of more than $0.25 or 5 percent 

worse than the NBBO at the time when 

the order reaches the System, whichever 

is greater, will be cancelled. Although 

the Rule states that it applies this collar 

to Orders with Primary and Market 

Pegging, the Exchange has always 

intended for the collar to also apply to 

Orders with Midpoint Pegging, and in 

practice, it does so. The failure of the 

Rule to reflect the application of the 

collar to Midpoint Pegged Orders was 

an unintended omission. The Exchange 

now proposes to revise Rule 4703(d) to 

correct this omission. 

Changes to the Trade Now Order 

Attribute 

Additionally, the Exchange proposes 

to amend its rules governing the Trade 

Now Attribute, at Rule 4703(l). Pursuant 

to Rule 4703(l), Trade Now is an Order 

Attribute that allows a resting Order that 

becomes locked by an incoming 

Displayed Order to execute against the 

available size of a contra-side locking 

Order as a liquidity taker. 

The Exchange proposes to amend 

Trade Now by streamlining and 

simplifying the instructions that 

participants must enter to address the 

handling of their orders in various 

locking or crossing scenarios.20

Specifically, rather than require a 

participant to manually send a Trade 

Now instruction whenever an Order 

entered through OUCH or FLITE 

becomes locked, the proposed amended 

Rule will allow for a participant to 

enable Trade Now functionality on a 

port-level basis for all Order entry 

protocols and for all Order Types that 

support Trade Now, as well as on an 

order-by-order basis, for the NonDisplayed Order Type, when entered 

through OUCH or FLITE.21 For Orders 

entered through RASH or FIX, Trade 

Now will be available on an order-byorder basis for all Order Types that 

support Trade Now. The proposal will 

not extend Trade Now functionality to 

new Order Types.22

The Exchange intends to implement 

the foregoing changes during the Third 

Quarter of 2021. The Exchange will 

issue an Equity Trader Alert at least 7 

days in advance of implementing the 

changes. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,23 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,24

in particular, in that it is designed to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general to protect 

investors and the public interest. 

The Exchange believes that its 

proposed amendments to the Pegging 

Order Attribute, at Rule 4703(d), are 

consistent with the Act. The proposals 

to eliminate the functionality that 

provides for the System to reject certain 

Pegged Orders that lack a permissible 

pegging price, or to post the Orders at 

their limit price, are consistent with the 

Act because they eliminate unwarranted 

inefficiencies that arise when 

participants must repeatedly re-enter 

rejected Pegged Orders until a 

permissible price becomes 

available.25 26 It is also consistent with 

the Act to maintain the existing practice 

in the Rule of rejecting a Pegged Order 

without a permissible pegging price 

where the Order has been assigned a 

Routing Attribute. The Exchange is not 

yet prepared to hold such Orders in the 

same way that it proposes to do so for 

Pegged Orders without Routing 

Attributes, although it contemplates 

doing so in the near future. 

Moreover, the proposal to amend Rule 

4703(d) to state expressly that Midpoint 

Pegging Orders are subject to price 

collars, like Orders with Primary and 

Market Pegging, will correct an 

unintended omission and ensure that 

the Rule is consistent with existing 

Exchange practice and with customer 

expectations. The application of these 

collars will prevent Pegged Orders from 

having prices that deviate too far away 

from where the security was trading 

when the Order was first entered.27

The Exchange’s proposals to amend 

its rules governing the Trade Now 

Attribute, at Rule 4703(l), is consistent 

with the Act. The proposal will 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices 38369 

28As noted above, for Orders entered through 

RASH or FIX, Trade Now will be available on an 

order-by-order basis for all Order Types that 

support Trade Now. 

29 15 U.S.C. 78s(b)(3)(A). 

30 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 31 17 CFR 200.30–3(a)(12). 

streamline and simplify the instructions 

that participants must enter to address 

the handling of their orders in various 

locking or crossing scenarios. Rather 

than require a participant to manually 

send a Trade Now instruction whenever 

an Order entered through OUCH or 

FLITE becomes locked, the proposed 

amended Rule will allow for a 

participant to enable Trade Now 

functionality on a port-level basis for all 

Order entry protocols and for all Order 

Types that support Trade Now, as well 

as on an order-by-order basis, for the 

Non-Displayed Order Type, when 

entered through OUCH and FLITE.28

Furthermore, it is consistent with the 

Act to add language to Rule 4703(l) to 

state that Trade Now allows a resting 

Order that becomes locked ‘‘or crossed, 

as applicable, at its non-displayed 

price’’ by the ‘‘posted price’’ of an 

incoming Displayed Order to execute 

against a locking or crossing Order(s) 

automatically. The Exchange proposes 

to add the phrase ‘‘or crossed, as 

applicable, at its non-displayed price’’ 

for completeness. The Exchange also 

proposes to add the phrase ‘‘posted 

price’’ for purposes of clarity. It merely 

communicates that the incoming 

Displayed Order first posts to the 

Nasdaq Book, thereby locking or 

crossing the resting Order at its nondisplayed price. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. As a general 

principle, the proposed changes are 

reflective of the significant competition 

among exchanges and non-exchange 

venues for order flow. In this regard, 

proposed changes that facilitate 

enhancements to the Exchange’s System 

and order entry protocols as well as 

those that amend and clarify the 

Exchange’s Rules regarding its Order 

Attributes, are pro-competitive because 

they bolster the efficiency, integrity, and 

overall attractiveness of the Exchange in 

an absolute sense and relative to its 

peers. 

Moreover, none of the proposed 

changes will unduly burden intramarket competition among various 

Exchange participants. Participants will 

experience no competitive impact from 

its proposals to hold (up to one second), 

rather than reject (or accept at their limit 

price), Pegging Orders (other than those 

with Routing Attributes) in 

circumstances in which no permissible 

pegging price is available, as these 

proposals will merely eliminate 

unwarranted inefficiencies that ensue 

from the System requiring participants 

to repeatedly re-enter Pegged Orders 

until a price becomes available, or the 

System posting Pegged Orders at their 

limit prices, if there is no pegging price. 

Moreover, the proposal to amend Rule 

4703(d) to state expressly that Midpoint 

Pegging Orders are subject to price 

collars, like Orders with Primary and 

Market Pegging, will have no 

competitive impact as the proposal is 

consistent with existing Exchange 

practice and with customer 

expectations. 

The Exchange’s proposals to amend 

its rules governing Trade Now will have 

no competitive impact on participants 

other than by rendering these Order 

Attributes more efficient and easier for 

participants to utilize. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the proposed rule change 

does not: (i) Significantly affect the 

protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 29 and Rule 19b– 

4(f)(6) thereunder.30

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

BX–2021–030 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–BX–2021–030. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–BX–2021–030, and should 

be submitted on or before August 10, 

2021. 


khammond on DSKJM1Z7X2PROD with NOTICES
38370 Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3ERM provides the oversight and framework for 

identifying, assessing, managing, monitoring and 

reporting on risk across the ICE, Inc. organization 

and has dedicated resources focused on various 

ICE, Inc. business units, including ICC. The ICC 

BCP & DR Oversight Committee assists in fulfilling 

oversight responsibilities with respect to business 

continuity planning (‘‘BCP’’) and disaster recovery 

(‘‘DR’’) for ICC. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.31

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–15344 Filed 7–19–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92402; File No. SR–ICC– 

2021–015] 

Self-Regulatory Organizations; ICE 

Clear Credit LLC; Notice of Filing of 

Proposed Rule Change Relating to the 

ICC Governance Playbook, ICC Risk 

Management Framework, and ICC 

Treasury Operations Policies and 

Procedures 

July 14, 2021. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934, (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on June 30, 

2021, ICE Clear Credit LLC (‘‘ICC’’) filed 

with the Securities and Exchange 

Commission the proposed rule change 

as described in Items I, II, and III below, 

which Items have been prepared 

primarily by ICC. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

The principal purpose of the 

proposed rule change is to make 

changes to the Governance Playbook, 

Risk Management Framework, and 

Treasury Operations Policies and 

Procedures (‘‘Treasury Policy’’) 

(together, the ‘‘Documents’’). These 

revisions do not require any changes to 

the ICC Clearing Rules (the ‘‘Rules’’). 

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, ICC 

included statements concerning the 

purpose of and basis for the proposed 

rule change, security-based swap 

submission, or advance notice and 

discussed any comments it received on 

the proposed rule change, securitybased swap submission, or advance 

notice. The text of these statements may 

be examined at the places specified in 

Item IV below. ICC has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of these statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

(a) Purpose 

ICC proposes amendments to its 

Governance Playbook, Risk Management 

Framework, and Treasury Policy to 

update descriptions of certain internal 

committees and make other clarification 

or clean-up changes. ICC maintains the 

Participant Review Committee (‘‘PRC’’) 

and the Credit Review Subcommittee of 

the PRC (‘‘CRS’’) (together, the 

‘‘Committees’’), which are internal 

committees that assist in fulfilling 

counterparty review responsibilities 

with respect to ICC’s Clearing 

Participants (‘‘CPs’’) and financial 

service providers (‘‘FSPs’’). The 

proposed changes amend descriptions 

related to membership composition, 

meeting frequency, and responsibilities 

of the Committees in the Documents to 

reflect recent changes to the 

Committees’ charters. ICC believes that 

such revisions will facilitate the prompt 

and accurate clearance and settlement of 

securities transactions and derivative 

agreements, contracts, and transactions 

for which it is responsible. ICC proposes 

to make such changes effective 

following Commission approval of the 

proposed rule change. The proposed 

revisions are described in detail as 

follows. 

I. Governance Playbook 

The Governance Playbook contains 

information regarding the roles and 

responsibilities of the Board and various 

committees at ICC. ICC proposes 

amendments in respect of the 

Committees in Section IV (Committees) 

to reflect recent changes to their 

charters. ICC proposes a grammatical 

edit to refer to ‘‘financial services 

providers’’ as ‘‘financial service 

providers’’ in the description of the PRC 

and throughout the document. ICC 

proposes updated language on the 

membership composition of the PRC, 

including to add the ICC Risk Oversight 

Officer as a member. With respect to the 

CRS, the proposed changes remove the 

authority to approve FSPs and specify 

that the CRS has an advisory role. In 

this role, the CRS may make 

recommendations to the PRC with 

respect to matters of creditworthiness of 

CPs and creditworthiness and 

performance of FSPs. The proposed 

changes also update the membership 

composition of the CRS to include the 

Risk Oversight Officer and remove the 

ICC Risk Management representative as 

a voting member. Risk Management 

representatives will participate as nonvoting members and continue to present 

materials to allow the CRS to perform its 

responsibilities and duties. 

II. Risk Management Framework 

ICC proposes conforming revisions to 

the Risk Management Framework to 

update descriptions of the Committees 

and to make other clarification or cleanup changes. ICC proposes to amend 

Section II (Governance and 

Organization) to update a chart that 

details the governance and committee 

structure at ICC. The updated chart 

indicates that the Intercontinental 

Exchange, Inc. (‘‘ICE, Inc.’’) Enterprise 

Risk Management Department (‘‘ERM’’) 

reports to the Board and corrects a 

typographical error to replace the ‘‘BCP 

Oversight Committee’’ with the ‘‘BCP & 

DR Oversight Committee.’’ 3 In Section 

II.A (Committees), the proposed changes 

further clarify the review and approval 

process of the policies and procedures 

that comprise ICC’s overall risk 

management framework, which consists 

of review by the Risk Committee and 

review and approval by the Board at 

least annually. 

In Section II.A (Committees), ICC also 

proposes to update descriptions of the 

Committees to align with their amended 

charters. ICC proposes a grammatical 

edit to refer to ‘‘financial services 

providers’’ as ‘‘financial service 

providers’’ and a footnote to further 

define the entities included as FSPs. 

The proposed changes specify that the 

PRC meets at least quarterly and more 

frequently as needed. Additionally, the 

proposed changes further distinguish 

PRC and CRS responsibilities with 

respect to FSPs, noting that the PRC is 

responsible for overseeing the due 

diligence and approval of FSPs and the 

CRS is responsible for overseeing initial 

due diligence and monitoring ongoing 

credit due diligence for FSPs. ICC also 

proposes language describing the 

advisory role of the CRS to the PRC for 

matters regarding the creditworthiness 

of CPs and the creditworthiness and 

performance of FSPs. ICC further 

proposes to amend Appendix 1 to the 

document to update language related to 

the membership composition of the 

PRC, including to add the Risk 


khammond on DSKJM1Z7X2PROD with NOTICES